Skip to comments.Postal Service Struggles to Stay Solvent, and Relevant (may shut down this winter)
Posted on 09/04/2011 4:49:11 PM PDT by Free ThinkerNY
The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.
Our situation is extremely serious, the postmaster general, Patrick R. Donahoe, said in an interview. If Congress doesnt act, we will default.
In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agencys deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers, nearly one-fifth of the agencys work force.
The post offices problems stem from one hard reality: it is getting squeezed on both revenue and costs.
As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.
At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post offices costs. Labor represents 80 percent of the agencys expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.
(Excerpt) Read more at nytimes.com ...
Good riddance postal union.
Pray for America
Here comes 60c stamps
They are NOT a disinterested observer to any of this.
Frankly I never trusted them when I had to work with their agents and cronies and I sure don't trust them now.
But it won't survive the unions.
Offer the entire operation up for contract takeover on a long term lease. No stipulation for Saturday delivery, we don’t need it.
shut it down.
or trim it to the core. Make people go to their local post office to get mail. No more junk mail, yay.
Does anyone still use the post office for anything important? Isn’t practically all business communication these days by FEDEX, DHL or the other couriers — or email?
It’s time to realize that the postal service is an anachronism that has pretty much outlived it’s utility and downsize it to realistic projections.
It should probably be privatized.
privatize it, and do away with the union.
how many million will that add to the jobless rate in this nation?
We had stamp machines in our post offices in Birmingham, Al. and they took them out because they said the machine did away with one of the workers jobs. Now we have to stand in line to get a stamp. Fiscal responsibility is not on the post offices agenda. Keeping Postal workers jobs is. Until the government starts running like a business it will continue to lose money.
A lot of good people, many military veterans, work for the USPS. And unlike some government entities, this organization performs a Constitutional function and does useful work.
In an electronic age, all that will survive is the physical delivery of hard goods by parcel. Too bad for the USPS that it conceded its dominance in that business to FedEx and UPS decades ago.
The Post Office probably suffers from too many managers and adminstrators, just like the public schools. Cutting the real fat would save millions.
Sell it to UPS or Fed Ex
I just suggested the same thing for professions like electricians, plumbers, maintenance for schools and public buildings. Contract it out....We need to get rid of these big fat government pensions....it’s a snowball and it’s killing us!!
They could also alternate Saturday and Monday as days without delivery.
...and delivery once a week. Of course, UPS workers will be paid for a full week regardless.
The defining moment for me was one Christmas, standing in line at the post office during lunch hour, and listening to a postal worker whine about how busy the lunch hour was. Her solution was that the post office should close during the lunch hour.
Her attitude was that her job was sinecure, and we were inconveniencing her.
I have dealt with many friendly, helpful, efficient postal workers. Unfortunately, the deadwood is going to drag them all down.
Yes, some people do use the post office. We have an internet book business and our best shipping rates come through the USPS. We used to do a high volume through eBay and shipping was all through the post office. This would be terrible for us. I do some online bill paying, but not everything. I depend on the mail for quite a bit in our lives.
Junk mail is the majority of the mail, largely because bulk mail shipping rates are effectively a government subsidy for direct mail marketers.
If only we could get the rest of the Federal Government to follow in a similar manner.
Let Fed Ex & UPS make a profit with those conditions imposed upon them.
I live out in a rural area and a great number of poor folks and the elderly use the post office. Ours is in danger of closing, forcing residents to drive up to 15 miles to get to the nearest post office.
Not fair to them.
UPS = USPS
“But it won’t survive the unions.”
That sums it up nicely, in a nutshell.
Drastically raising the price of postage will likely decrease revenue to UPS.
That explains what happened to the one at my post office.
I can only guess as to when they get rid of the self-postage machine.
agree. the PO is one of the things fedgov is supposed to do. Get rid of the depts of education and energy first.
You'd be surprised. Millions of eBay sellers, Amazon book sellers, and other small online sellers, use USPS First Class Parcel rates, Media Mail, and Priority Mail Flat Rate. They depend on these sales for much and, in many cases, all of their income. UPS and FedEx are much too expensive for parcels of 2 lb or less. Close the Post Office and you will add not only the postal workers, but also these sellers, to the growing list of unemployed.
Are the people who sort the mail worth $90K/yr? Have you noticed how many Marcedes and BMWs in the post office worker lot?
Pray for America
A serious question to you. If the public sector can’t afford to provide for pensions and benefits, how can the private sector? If the private sector doesn’t do this or provide for these functions in their wage base what is the alternate consequence?
Without some kind of health plan, disability plan and retirement savings program we end up with people for whom sickness resulting in a long or short term inability to work or old age is more-or-less a death sentence. Certainly all of these things can be provided by some kind of private insurance programs but it still has to be paid for.
Many people in the labor class are taking home a just adequate living wage. Others are more prosperous but still probably do not generate enough excess cash to provide the benefits they need.
Fedex manages much of their cost by an army of part-time workers who have no benefits.
For there to be any savings in labor cost as a result of privatization benefits have to be fewer or somehow less costly. So, the question is, by what means are labor costs cut and with what long term consequence to the general well being. If one does not care about this any solution is acceptable.
Start selling Green Stamps...
Like a parasite, unions will eventually always kill the host.
The postal workers have a choice. Allow their hours and benefits to be adjusted or join the ranks of the unemployed.
There are many things the post office can do, but if they do not control the cost of labor, then nothing else will work.
If they let it die, and let it go private, somebody will figure it out and make money off of it.
The country will go on without the postal service, after some time of adjustment.
Then they need to do the same thing with every other inefficient, union-bloated agency that the Fed Govt supports.
Do you have any statistics about how many mail subscriptions the NYT still has or are you just blowing smoke again?
There are other issues at play here that are out of the control of the postal service. They can’t raise rates as needed plus the feds forced them to prefund retirement some 75 years ahead.
They’d be a lot better off if they could run it like a business but they’re in what used to be a unique position of being tied to the federal government in ways they shouldn’t be.
As far as their own fault is concerned, there are the unions, the fact that they seem to be overstaffed at the administrative levels and more service than is necessary which means excess staff.
If it were up to me I would cut Wednesday and Saturday delivery. I would allow them to set rates as needed. I would eliminate door to door service in the city and and rural delivery within a mile of the post office.
My local post office only has about 200 PO boxes and its in a rented building. Meanwhile, 25 yards away a brand new township owned building sits empty and I would make a deal with the township to move there and expand. There are another 1500 or more people within a mile of the post office on a rural route and I would move their delivery to the new PO.
Looks like the Dems are about to lose another chunk of their taxpayer subsidized voter base.
Their tv commercials say they’re self-sustaining and not part of government.
Then they have their same people say in Congress doesn’t save them they’re toast.
This is the kind of agency we’re dealing with here.
Is every freaking government agency just a bunch of lying shell-gamers? Damn.
As far as your comment on my blowing smoke, you are a nutcase.
Cut salaries and benefits.
Fedex and UPS already deliver much of USPS’s express and priority mail over long haul routes.
And what is your problem? The USPS is supported by postage. It does not receive a government subsidy. In fact, the financial problem is because USPS has been subsidizing the US government.
Actually I still use it to receive and pay bills. (Old habits die hard!) And the various governments harass me for money using US Mail, and expect (mostly) to be paid or responded to by mail.
That still doesn’t address the fact that the unions are taking USPS down.
I can't speak for important, but I can tell you that if you go to one of the few post offices which keeps Saturday hours (usually something pretty meager like 10 a.m. to 2 p.m.), you will see lines stretching to the front door.
USPS has always rented space on available aircraft ~ that's the way mail is transported in this country, so it's not just UPS and FedEx ~ it's all the other airlines as well.
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